By Matt Gracey, Jr.
On Thursday, March 13, 2014, the Florida Supreme Court ruled that a 2003 law limiting damages in medical-malpractice cases is unconstitutional. The long-awaited ruling came in the case of a Panhandle woman who died of complications after giving birth in 2006. The court ruled 5-2 that a cap on “non-economic” damages violates the Equal Protection Clause of the Florida Constitution.
This ruling only applies to death cases, but it is widely anticipated that in subsequent rulings coming shortly the court will extend it to all medical-malpractice cases. The ruling applies to all open death cases immediately. Even worse is that some cases with very little potential economic-damages value, like elderly patient cases, could become more interesting to the plaintiff bar for the non-economic value itself, which will further spur the filing of additional lawsuits.
Many doctors think this ruling will be appealed, but the legal experts tell me that because of the legal process of this case it is likely the final decision and is not appealable. About the only good news is that this case will have no effect on closed cases, but even with this there is a possibility of more bad news, since the Florida Supreme Court will be hearing a case, Miles v Weingrad (SC13-54) on June 4, 2014, questioning the retroactivity of the cap in this personal-injury case.
As a result of this ruling, we firmly believe that malpractice-insurance rates will increase. The more difficult question is when. In Georgia and Illinois the caps were overturned in the last few years and there have not been subsequent large rate increases. The difference is that in Florida the limits most doctors carry are much lower than the other states and the Florida plaintiff bar has some of the best lawyers in the country. This, combined with the number of uninsured doctors allowed to practice in Florida, unlike other states, and the fact that many malpractice-insurance companies are writing policies around breakeven pricing due to the competitive market of unrated insurers, will inevitably lead to price increases. Insurance companies always, however, take a few years to react to changing market conditions since their rates are actuarially based on historical data. I predict much jostling in the industry over pricing in the next year or two as insurers try to be the last to raise their rates in response to the greatly increased claims frequency and severity that Florida’s doctors will experience against them
Many doctors will think that just practicing uninsured will be the right answer, just like some 30 million Americans thought going bare for health insurance would work. I predict that as rates rise and more doctors go bare, eventually the state legislators, and I bet even medical leaders, will call for all doctors to have coverage so that the insured doctors are not in essence paying for the uninsured doctors who choose in multi defendant cases to go bankrupt, leaving the insured doctors handling the responsibility for injured patients
Higher limits will now become even more important in anticipation of the upturn in the frequency of cases filed against Florida doctors and higher jury awards and settlements. With the now-normal limits of $250,000/$750,000, many doctors will find themselves woefully underinsured given the recent legislative actions allowing insurers to give doctors the right to consent to all settlements. This really just limits doctors’ ability to file a bad-faith claim to protect themselves in the event of an excess-limits verdict
My advice is to “move to high ground” in anticipation of the coming wave of lawsuits against doctors. Actions suggested include moving your malpractice coverage to financially secure, highly rated AM Best insurance companies that are “admitted” in Florida, considering raising your limits, joining a purchasing group of your peers to gain purchasing power to shelter you from the coming storms, and finding a trusted and experienced expert to guide you through the malpractice-insurance maze.